Coming of Age or Fading Away? The Curious State of the Retail CMO

Perhaps no other executive role within retailer and brand marketing organizations has seen more upheaval in recent years than that of the chief marketing officer. For the first time in its more than a century of history, Campbell’s hired a CMO, folding marketing services, global advertising, design, media, digital marketing, and consumer insights into a single position. Campbell’s approach is an example of how future CMOs will be required to wear many hats, not all of them creative.

On the other hand, retailers like Walgreens and J.C. Penney have eliminated the CMO role altogether, even as they embark on game-changing strategies. Walgreens CEO Greg Wasson and J.C. Penney CEO Ron Johnson are a new breed of controversial, hands-on retail chief executives who may be more invested in deploying and expanding the brand visions that they have established than employing head marketers to do it for them. Both have laid out new premises for their businesses, with Wasson deciding that Walgreens will operate not as a drug chain but as a “health and daily living” retailer and Johnson declaring that Penney’s will now become the “first specialty department store.” Both have eliminated the CMO roles within their organizations after their high-profile chief marketers departed and neither has looked back.

Wasson’s major initiatives have all been positioned as furthering his health and daily living mission, including Walgreens’ acceleration of the grocery category, its new store formats, and its purchase of a 45% share of European personal care mega-brand, Alliance Boots, for $6.7 billion. With the exception of a bit of backtracking on his initial promise to curtail promotional activity, Mr. Johnson has stayed the course on converting Penney’s stores into brand-boutiques-in-a-box and on his radical remake of the company into a technology-centric enterprise despite tumbling numbers and plenty of tomato throwing on the part of pundits. Whether an active and opinionated CMO would have slowed the pace of change or tempered the strategy for either retailer will never been known. Clearly, the rise and fall of both organizations’ corporate brand strategies has top down accountability and every touch point and brand partnership will be scrutinized from loftier heights.

It doesn’t seem that long ago that CMOs and marketing teams were at the top of the retail food chain, creating a short-lived star culture (think John Fleming at Walmart and Michael Francis at Target). As stories of marketing-led vetoes caused power struggles within retail organizations and sent shockwaves through supplier teams, the meteoric rise of the power marketer became a disruptive follow-up to the years-long reigns of merchant princes. During this period, licensees and licensors that expanded their relationships with retailer marketing teams while maintaining touches with merchants were ahead of the curve. Going forward, customizing approaches based on company-specific dynamics will be critical as CMO strategies and marketing accountabilities become less straightforward.

Bottom line:

A retailer without a CMO isn’t necessarily without a brand vision. In fact, the opposite is more likely to be true, with brand direction coming from the top.

Even if brand direction still hasn’t been taken out of the hands of many CMOs, successful licensees and licensors will work toward top-to-top relationships with both retailers and brand marketers.

While not all retailers are embarking on extreme makeovers at the level of Penney and Walgreens, the bold moves and organizational shakeups that these retailers are initiating will influence the industry.